Adoption Benefits in Today's World

Employee Benefits News: Adoption

It’s the 21st century. Parents of adopted children are now seeing equal benefits. More and more employers are offering some type of adoption benefit as part of their employee benefits package. Not only will this help employers retain employees, it’ll boost a positive public image of their company. Below are some of the specifics when it comes to adoption.

Adoption benefits can take many forms, but are generally divided into three categories: information resources, financial assistance and time off. Referrals, covered expenses and adoptive parental leave all contribute to the benefits. All three categories are beneficial for adoptive parents and can allow for an easier adoption process.

When it comes to legalities, adoption benefits are administered differently through several Acts passed by Congress. HIPAA (Health Insurance Portability and Accountability Act) allows a special enrollment period for newly adopted children, and if they’re enrolled within 30 days of the adoption, they’re not subject to a waiting period prior to getting coverage. If an adoption benefit includes reimbursement for legal expenses, then it’s considered an ERISA (Employee Retirement Income Security Act) welfare benefit. That means it would be subject to certain reporting and disclosure requirements. COBRA (Consolidated Omnibus Budget Reconciliation Act) states that an adoptive child will be covered if the employee is being covered at that time.

Did you know that tax exclusion is available for employees who receive adoption assistance? Up to a certain limit, employees are not taxed on employer-provided adoption assistance, unless they have a modified adjusted gross income (or modified AGI) above a certain amount. And, any taxpayer who adopts a child is eligible for up to a nonrefundable tax credit for each eligible child equal to the tax exclusion.

There are a few qualifications to be aware of in order for an adopted child to be considered eligible. The child must be under 18 at the time of adoption, or is physically or mentally unable to care for himself or herself. Qualified adoption expenses include adoption fees, court costs, attorney fees, traveling expenses (including meals and lodging) and other expenses that are directly related to the adoption.

Providing adoption benefits not only helps out your current employees, it also helps you recruit new talent. Because adoption is expensive, confusing and takes time, if someone is planning to adopt a child, he or she will be excited to work for a company that supports them and their efforts. If you have additional questions about offering this benefit to employees, contact an ‘A’ team member today and get answers.

Jason Blomquist is a Senior Vice President and Practice Leader at Assurance. With over 15 years of experience, he's an expert in self-funded plans and claims management. Prior to his role as Practice Leader, Jason was a Senior Vice President with Assurance. Prior to that, he served as Employee Benefits Practice Leader for a small insurance agency in Chicago. Jason earned his Bachelor of Arts degree in Economics and Political Science from the University of Wisconsin-Madison. He completed his Group Benefits Associate (GBA) and Certified Employee Benefit Specialist (CEBS) designations through the University of Pennsylvania Wharton School of Business. He's a member of the Society for Human Resource Management (SHRM), the Construction Financial Management Association (CFMA) and the GOA Regional Business Association. Jason also participates in local and national Broker Advisory Boards for several insurance carriers.

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